The Waterton Precious Metals Fund II will focus on
late-stage development projects in politically stable
jurisdictions, primarily North America.

Private equity firms were once only minor players in mining,
but an extended capital freeze has brought down valuations,
attracting more firms to the sector and leaving miners with few
other options to raise funds.

Bankers, deal lawyers and private equity firms are
predicting a flurry of private equity transactions in mining
this year by smaller, mining-focused private equity groups like
Toronto-based Waterton.

"I think as the market stays depressed, people won't view it
as depressed. People will view it as the new reality," said
Isser Elishis, chief investment officer at Waterton.

Investors and boards will have to decide whether to dilute
their share bases or sell, said Elishis, and that is likely to
boost private equity activity.

The firm will look at acquisitions, joint ventures and
partnerships. The fund is set to run for nine years from last
July, and acquisitions will likely be in the range of $25
million to $200 million, Elishis said.

"We aim to have the capital deployed over the next few
years, but it will speed up or slow down depending on the
opportunities," he said.

Waterton is already in the midst of a hostile bid for
Chaparral Gold Corp, a Nevada-focused precious metals
explorer.
(Reporting by Allison Martell; Editing by Eric Walsh)